Senate approves governor’s tax cut

Thursday

LITTLE ROCK — The Arkansas Senate on Thursday approved a bill containing Gov. Asa Hutchinson’s proposed middle-class tax, cut despite vocal opposition by two of the bill’s co-sponsors who objected to the timing.

LITTLE ROCK — The Arkansas Senate on Thursday approved a bill containing Gov. Asa Hutchinson’s proposed middle-class tax, cut despite vocal opposition by two of the bill’s co-sponsors who objected to the timing.

The Senate voted 30-3 to approve Senate Bill 6 by Senate President Pro Tem Jonathan Dismang, R-Beebe. Under the bill, people earning between $21,000 and $75,000 a year would see their state income tax rate decrease by 1 percentage point compared to last year.

The Senate approved the bill with an amendment that would repeal a capital gains tax cut the Legislature approved in 2013. The bill also includes language partially delaying implementation of a 2013 measure to reduce the rate for all state income tax brackets by one-tenth of a percentage point.

The bill goes to the House.

Sen. Joyce Elliot, D-Little Rock, a co-sponsor of the bill who voted against it, argued that the bill should be delayed until after the governor reveals his proposed state budget.

"Who isn’t for a tax cut?" she asked in remarks from the floor. "This bill will benefit many of my constituents and, in fact, will benefit me personally."

But Elliott added, "I’m thinking it’s going to be just as good if it passes two weeks from now."

Sen. Linda Chesterfield, D-Little Rock, another co-sponsor, and Sen. David Johnson, D-Little Rock, also voted against the bill.

Chesterfield also said she objected to the timing.

"Why not wait until after the governor’s budget speech?" she argued. "We’ll have more information then."

Hutchinson has said he will present his proposed budget Tuesday.

SB6 would reduce the income tax rate for people earning between $35,100 and $75,000 to 6 percent and would reduce the rate for people earning at least $21,000 but less than $35,100 to 5 percent. People in those tax brackets paid 7 percent and 6 percent, respectively, last year.

With the repeal of the capital gains tax cut and the partial delay of the across-the-board income tax cut, the measure is projected to cost $12.8 million in fiscal 2016 and $80.6 million in fiscal 2017.

The proposed tax cut was the cornerstone of Hutchinson’s campaign for governor.

The House voted 93-0 Thursday to approve House Bill 1013 by Rep. Nate Bell, R-Mena.

Under the bill, if a county clerk is appointed by a judge to handle the sale of property, money paid for the property would go into a fund that could be used only to offset administrative costs related to the sale or for the general operating expenses of the county clerk’s office. The bill goes to the Senate.